Monday, November 24, 2008

The New and Improved New Deal

Franklin Roosevelt and the New Deal: a fiercely independent punk group, or the words on every pundit's lips these days? With the economy in virtual free fall, and Democrats riding a tide of public support into the White House and congress, it's starting to look like 1932 all over again.

A recent cover of Time Magazine had an iconic photograph of FDR in an open-top car slightly altered to show president-elect Obama, over the title "The New New Deal."George Packer, writing for the New Yorker, recently predicted an era of “new liberalism” to begin shortly, and examined Obama alongside Roosevelt.

The parallels are strikingly similiar. Obama was elected on a wave of issues, as the public happily ushered the George W. Bush out of the White House. Like FDR, Obama faces a staggering financial crisis. Like FDR, Obama has surrounded himself with pragmatists and intellectuals to deal with the problem. Many have already guessed that the 44th president's opening moves will match those of the 32nd, most notably, in something similar to FDR's famous, and controversial, New Deal.

The New Deal was the name Roosevelt gave to a series of economic programs he initiated during the great depression. It represented a sizable shift in domestic and economic policy, namely: increased federal government control over the economy, money, regulation, and production. Upon accepting the 1932 Democratic nomination for president, Roosevelt pledged himself to “a new deal for the American people.” This deal was to replace the extremely unpopular Old Deal of laissez-faire economics which had led to the stock market crash in 1929 and an unemployment rate of 25%. A little known fact is that the expression “new deal” was borrowed from the title of a Stuart Chase book “A New Deal: 10 Reasons Why the Old Deal Sucks” published earlier in the year.

The New Deal was a blend of pragmatism and experiment. Its policies drew from ideas proposed earlier in the 20th century. Roosevelt formed what he called the Brain Trust, a group of advisors to assist in recovery policies. Many believed government action was the only viable solution from, as General Hugh Johnson put it, “the murderous doctrine of savage and wolfish individualism, looking to dog-eat-dog and devil take the hindmost!”

The New Deal was phased out after America entered World War Two in 1941. What followed as a period of high times and American economic dominance. A Square Deal was enacted 1952 by President Eisenhower, followed by President Johnson’s Great Society Deal in 1965. This was ebbed by President Nixon’s Raw Deal in 1972, President Reagan’s No Deal in 1983, and President Bush’s Deal or No Deal in 2005. Now President-elect Barack Obama stands with his hands on the arc of history, ready to bend it back towards Roosevelt’s policies in what may become a New and Improved New Deal for the 21st century.

Will it bring us out of our current depression? Many conservatives, to whom FDR’s New Deal has, for years, been a rallying cry, say no, and claim that even the original policies did not turn the economy around, so why try them again? The lasting social institutions erected by New Deal policies have been targets for conservatives for years, culminating in President Bush’s attempt to privatize Social Security in 2005. That may prove to be the high-water-mark of conservativism for a while. Once again, at the crest of another economic crisis, the Democrats find themselves with their hands firmly on the wheel of history.